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Dave CPA, Accountant

Category: Tax

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Experience: Vast knowledge within the accounting/tax industry

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What is the best program for me to use for my book keeping.

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What is the best program for me to use for my book keeping. I have tryied quickbooks but it is super confusing. I run a small 4 room motel and I have purchased an old hotel that i am currently renovating

Thanks for the positive rating and bonus. You are asking a good question. I would typically recommend quickbooks, but I know that isn't your preference. Since it sounds like you have a small operation, you might want to try "Bookkeeper". Now I haven't tried it, but I have heard nice things about it. It is sold for only $40 vs other software, which could be hundreds of dollars. So if you don't like it, you aren't out a lot of money. Below is a link with more info and some reviews. The second link has a comparison of many different types of accounting software. You can get a feel for price and optimization.

I bought a DUMP of a motel "the little 4 room" and I had to do a ton of work on it. I dont know how to figure out what is tax deductible and what isn't. I mean I understand that they say. If it is repairs then it is. but if it adds to the value or adds to the lifespan then it is depreciated. I guess I get that. but when everything that I did to this place was both repairs and adds to the value then how do I decide which is which?

Normal repairs aren't added the overall value, but if you added 4 more rooms as an example then that construction would be added to the value of the property and depreciated over the useful life. It sounds like your repairs would just be normal maintenance.

There can be all kinds of different scenarios. I would generally agree with your assessment. Below is the definition per the irs code.

Capitalization is the proper treatment for expenditures incurred in new construction. See §§ 263(a) and 263A. Capitalization is also generally required for additions to existing buildings or for installations of material components to buildings or equipment.

Yes those are the basic rules of thumb. UOP means Unit of Property. So apply what you are doing to the property to see if it fits this definition and you will fall under the guidelines of capitalization.

The definition of rehabilitation falls under the general plan of rehabilitation doctrine. The general plan of rehabilitation doctrine provides that expenses incurred as part of a plan of general rehabilitation must be capitalized even though the same expenses incurred separately would be deductible as ordinary and necessary repairs. The emerging general standard after INDOPCO for current deduction of an expenditure with future benefits, the case with most repair/improvement expenditures, is a balancing test: Whether the taxpayer's administrative and record keeping costs associated with capitalization outweigh the potential distortion of income from a current deduction of the future benefit expenditures. "Rough justice" rules for current deduction of future benefits expenditures, reflecting that balancing standard, include whether (1) the expenditure is relatively small or the future benefit is "incidental" to the current benefit, (2) the expenditures are regularly recurring, (3) future benefits are short-term or variable, and (4) the burdens of capitalization outweigh in general the revenue benefits to the Treasury from capitalization of the expenditure; for example, where the cost once capitalized may not be depreciated or depreciated only over a period longer than the expected future benefit (slow or no depreciation). The Service and courts often have incorrectly relied on the general plan of rehabilitation to capitalize post-INDOPCO repair or improvement costs, where one of these rough justice exceptions to capitalization should have been used.

I have to logg off for now, but I will be back on later on this afternoon. You can reach out to me directly, but if you require immediate assistance, the other experts on this site are very helpful and knowledgeable as well. Thanks for your business. Regards Dave

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. OrvilleHesperia, California

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